Ambuja Cements to invest Rs. 2,000 cr in Rajasthan

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SME Times News Bureau | 29 Dec, 2012
India's third-largest cement maker, Ambuja Cements Ltd., plans to invest Rs.2,000 crore for a five million tonnes integrated cement plant in Rajasthan and the northern region of the country, a top company official said Friday.

"We are adding new capacities. We are actively pursuing the five million tonnes capacity expansion in Rajasthan and neighbouring northern regions with an investment of Rs.2,000 crore," said company CEO Ajay Kapur.

"A typical cement plant requires 1,000 hectares of land and we have acquired most of the land. There are a few approvals to be taken and then we can start work," he told reporters at the company plant at Sankrail (West Bengal) in Howrah district.

The company would also be adding 0.9 million tonnes capacity to the 1.5 million tonnes Sankrail plant over the next two years at a cost of Rs.325 crore, he said.

According to Kapur, the company controls 10 percent of the overall Indian cement market currently. "We would like to sustain the same for the next five years," he said.

The company also plans to open its third project in Bengal. Its other unit is Farakka with a 1.5 million tonnes capacity.

"We will be the largest player in the state. Currently our market share in Bengal is 18 percent and we hope to continue the same."

Kapur exuded confidence at the company continuing to register a double-digit growth rate. "The demand has been fairly boisterous. We have been growing in double-digit CAGR (compound annual growth rate) and aim to continue doing so."

"When we started in 1986, we were just 0.7 million tonnes, but today we are at 27.25 million tonnes (production). We are growing by about 15 per cent CAGR. Hopefully we are able to maintain the same trend," he said.

Divulging the company's further expansion plans, Kapur said a 1.25 million tonnes grinding unit will be established in Gujarat's Sanand.

In an attempt to improve distribution, the company will set up a one million tonnes bulk cement terminal in Mangalore, Karnataka, which is likely to be commissioned by March.

The company currently has bulk cement terminals at Surat in Gujarat, Panvel in Maharashtra and Cochin in Kerala.

Kapur also said that cement prices are likely to be stable. "We are seeing more or less stable pricing in line with inflation. At a national level, it is more or less in line with inflation. It is the trend we follow every year," he said.

Earlier this week, companies increased prices of the commodity in Kerala by Rs.10 per 50-kg bag, and in Gujarat by Rs.15 in anticipation of a spurt in demand.